Paycheck Protection Program (PPP) Updates
This bill adds an additional $284.45 billion to the PPP and allows first time PPP loan applicants to apply for the loan through March 31, 2021.
Second Chance PPP Loans for Eligible Businesses
Businesses can apply for a maximum loan of 2.5x average monthly payroll costs—up to $2 million—if they:
- Employ no more than 300 employees - IHRSA is seeking clarity on what time period SBA will be looking at to determining employee count,
- Have used—or will use—the full amount of their first PPP; and
- Demonstrate at least 25% reduction in gross receipts in the first, second, or third quarter of 2020 relative to the same quarter in 2019.
Borrowers can receive full loan forgiveness if they spend at least 60% of their PPP second draw loan on payroll costs.
Borrowers can now select between 8 weeks and 24 weeks for their loan forgiveness coverage period. The bill also sets aside support for first-time PPP borrowers with 10 or fewer employees, second-time PPP borrowers with 10 or fewer employees, first-time PPP borrowers who have been made newly eligible, and second-time returning PPP borrowers.
New Expenses Eligible for Forgiveness (Applies to ALL PPP loans)
- Software, cloud computing, human resources and accounting needs
- Property damage due to public disturbances not covered by insurance
- Supplier costs - pursuant a contract, purchase order, or order for goods in effect prior to taking out the loan that are essential to the recipient's operations at the time the expenditure was made. Supplier costs for perishable goods can be made before or during the life of the loan.
New Payroll Expenses
Borrowers can now include group life insurance, disability, vision or dental in payroll costs. This update applies to ALL PPP loans, including those previously taken out.
Borrowers who returned all or part of their PPP loan can reapply for the maximum amount applicable. It also allows lenders to recalculate borrowers’ loan amounts due to changes in regulations regardless of whether an SBA Form 1502 has been submitted.